Ethiopia says agreement reached with $US 1 billion bondholders to restructure financing it 

Borkena

Toronto – Ethiopia on Friday said that it has reached an agreement with a group of  ad hoc committee of  bondholders. 

It comes after a week-long meeting with the committee between December 23rd and January 1, 2026 to restructure debt repayment, according to a news release from the Ministry of Finance.

The debt was due by 2024 but Ethiopia was unable to pay it. 

White & Case LLP and Lazard (Ethiopia’s legal and financial advisors) were present in  the meeting that led to debt repayment restructuring. On the part of bondholders,  Gotshal & Manges (London) LLP and Ankura Sovereign Advisors LLP attended the meeting. 

The Ad Hoc Committee reportedly holds more than 45 percent of the bond Ethiopia was unable to pay by 2024. 

“The MoF is pleased to announce that the discussions yielded an agreement in principle (the “Agreement in Principle”) between Ethiopia and the Ad Hoc Committee on the principal financial terms of a restructuring of the 2024 Notes,” said Ethiopia’s Ministry of Finance. 

Notable in the statement from the Ministry is that an agreement has been reached on “on non-financial terms of the new instruments to be issued in the restructuring” the details of which is not the press release. 

The full news release from the Ministry reads as follows :

“Ethiopia reaches agreement in principle with Ad Hoc Committee of bondholders on principal financial terms of restructuring of 2024 Notes

Addis Ababa – 2 January 2026.  The Ministry of Finance (“MoF”) of the Federal Democratic Republic of Ethiopia (“Ethiopia”) announces today that between 23 December and 1 January 2026 (the “Restricted Period”), it held restricted discussions with a group of holders (the “Ad Hoc Committee”, and together with Ethiopia, the “Parties”) of its US$ 1 billion 6.625% Notes due 2024 (the “2024 Notes”) to discuss the potential restructuring of the 2024 Notes. Ethiopia was joined by its legal and financial advisors, White & Case LLP and Lazard, respectively, and the Ad Hoc Committee was joined by its legal and financial advisors, Weil, Gotshal & Manges (London) LLP and Ankura Sovereign Advisors LLP, respectively.  The Ad Hoc Committee comprises institutional holders controlling in aggregate more than 45% of the 2024 Notes.

The MoF is pleased to announce that the discussions yielded an agreement in principle (the “Agreement in Principle”) between Ethiopia and the Ad Hoc Committee on the principal financial terms of a restructuring of the 2024 Notes. 

Ethiopia believes that the Agreement in Principle is consistent with: (i) the targets and parameters of Ethiopia’s International Monetary Fund (“IMF”) programme; and (ii) the Comparability of Treatment principle as applied by Ethiopia’s official creditor committee (“OCC”). The terms of the Agreement in Principle have been communicated to the OCC for their non-objection as well as to the IMF to ensure compliance with Ethiopia’s long-term debt sustainability. 

In parallel, Ethiopia has committed to work collaboratively and in good faith with the Ad Hoc Committee and its advisors to reach agreement on non-financial terms of the new instruments to be issued in the restructuring. The Agreement in Principle remains subject to reaching agreement on such non-financial terms and receipt of the confirmations from the IMF and the OCC referenced above.  

Ethiopia also commits to expedite the implementation of the restructuring of the 2024 Notes through an exchange offer and/or consent solicitation as early as possible in 2026.

Ethiopia would like to thank the Ad Hoc Committee and the Ad Hoc Committee’s advisors for their close collaboration, constructive spirit and continuous support throughout the negotiations.”

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